Unity and Diversity in High-tech Growth and Renewal: Learning from Boston and Silicon Valley

Abstract

A new model of knowledge-based regional economic development was invented in Boston during the 1930s and subsequently transferred to northern California where it also had independent roots. Drawing upon academic, business and government resources and configuring them in new formats created new firms and new industries. Nevertheless, the two regions often appear dissimilar when they are contrasted synchronically, due to the different stages they may be in at the time. Thus, some observers argue that Boston and Silicon Valley are distinctive watersheds, irrelevant to follow-on regions. However, if the development process of these two prototypical high-tech regions are analysed diachronically, a trajectory with similar phases of development may be identified. We suggest that these two regions exemplify a general model for high-tech regional growth and renewal.

Notes

Interview with Director of University Relations, HP, 2005.

Etzkowitz and Klofsten (2005) outlined a four stage model of regional growth and renewal: Incipient, creating the idea for a new regional development model; Implementation, starting new activities and developing infrastructure; Consolidation and adjustment, integration of activities to improve the efficiency of the infrastructure; Self-sustaining growth, renew the system by identifying new areas of growth.

The venture capital process had previously existed, in nucleo, in investments made by wealthy family groups that had begun to professionalize their investment decision-making process by hiring staff to vet and monitor projects.

Networking events and student business plan competitions such as those sponsored by ITEC at Boston University and the MIT Entrepreneurship Centre create venues for venture capitalists, lawyers, serial, “newbie” and prospective firm founders to find each other. The social capital generated by these events is an overlay on their specific purposes and provides a sense of “high-tech” entrepreneurial community for their participants. Such centres, and their networking activities, are an outcome of university–industry interaction in mature regions, a source for their renewal, and may be utilized by nascent regions and aspirant universities as part of an initial development strategy. See, for example, http://www.EdinburghStanfordlink.org last accessed 18 April 2008.

The growth of these firms was also facilitated by community colleges, the third and lowest tier of the California Higher Education System. For example, the Computer Science Department at De Anza College in the Foothills Community College District consisted of a relatively few permanent staff, greatly expanded by adjuncts hired from industry. In addition to the well known story of importing human capital from abroad, a broad range of local persons, from high-school dropouts to literature PhD's, were retrained as computer programmers.

It is difficult to find an appropriate format for these relationships other than leaving them to faculty to arrange informally. OTL attempted, for example, to offer a single fee format for engineering innovations, with limited success. Large contracts, like the Novartis/Berkeley have not proved especially useful. There is typically little take-up by firm, sometimes due to shift in corporate interest in the interim from the signing of the deal to the performance of the research. University research results are often at too early a stage for large firms. There is a need to take these results through the start-up process and develop them further to demonstrate technical and commercial viability, before a large firm becomes seriously interested. A university official involved in one of these contracts remarked to the author that he could make such arrangements several times over, given the difficulties of large corporations in managing take-up and their tendency to decline opportunities.

In contrast to the division of knowledge into divergent epistemological spheres e.g. Pasteur, Edison and Bohr's Quadrants (Stokes, 1997); the polyvalency thesis holds for the unity of knowledge, with complementary aspects. Indeed, even the namesakes of these Quadrants spill over into others. For example, the “Edison effect” might well fit into Bohr's space. See also the 5th Triple Helix conference theme paper by Viale and Etzkowitz (2005) at: http://www.triple.helix5.com.